Owner of Aughinish plant reports worst losses for six years

Russian aluminium group Rusal has warned of "material uncertainty" over its future, as the world's largest aluminium producer reported a $3.2 billion loss in its worst annual performance since 2008.

The group, which owns the Aughinish Alumina plant in Shannon, confirmed it had asked lenders to delay a repayment due next month on part of its $10 billion net debt pile.

It said it expected to complete long-running negotiations with its banks to amend the terms of its debt, but warned there could be no certainty it would succeed.

“Management acknowledge that these conditions result in the existence of a material uncertainty with respect to the group’s ability to continue as a going concern,” the company said.

Rusal’s auditor, KPMG, included an “emphasis of matter” paragraph in its report on the company’s earnings statement to draw attention to the issue.

Rusal’s difficulties highlight the plight of Russia’s metals sector as it struggles under the burden of a slowing economy, weak commodity markets and the imposition of sanctions from the West.

However, the company, controlled by Oleg Deripaska and listed in Hong Kong, is also emblematic of the global aluminium industry, where overcapacity and high stocks have pushed prices to their lowest level in more than four years. – (Copyright The Financial Times Limited 2014)